Federal Trust wraps $8.5 million stock sale; Osisko Exploration prices C$10 million PIPE

By Sheri Kasprzak

New York, April 17 - Federal Trust Corp. led PIPE activity on Monday as the market cranked back up after the three-day weekend, but the Easter bunny certainly didn't leave a trail of new offerings in his wake.

In the Federal Trust deal, the bank holding company sold 850,000 shares to a group of accredited investors at a 10.7% discount to the company's $11.20 closing stock price on Thursday.

As of March 3, the company had 8,299,343 outstanding common shares.

Ryan Beck & Co., Inc. was the placement agent.

Federal Trust plans to use the proceeds to retire old debt and to provide additional working capital.

"We were very pleased with the demand for our stock and the confidence that our new and existing shareholders have in Federal Trust and its future," said James Suskiewich, the company's chief executive officer, in a news release issued Monday morning. "In the rising-rate environment, which is adversely impacting the cost of our borrowings, we elected to take advantage of the favorable equity environment to build our capital reserves and repay our borrowings.

"Approximately $5.5 million of the proceeds from the offering will be used to repay our holding company revolving credit line. The additional capital will also allow our bank subsidiary to remain well-capitalized while we continue our branch expansion, as well as provide new capital to support our mortgage subsidiary operations."

The company's stock lost 5 cents, or 0.45%, to end the day at $11.15 (Amex: FDT).

Moving to Federal Trust's latest earnings statement, the company reported net revenues of $884,000 for the quarter ended Sept. 30, 2005, compared with net revenues of $954,000 for the same period of 2004.

Sanford, Fla.-based Federal Trust is the holding company for Federal Trust Bank, which operates at seven offices in Florida.

In the broader PIPE market Monday, one sellside source said activity was relatively low given a dip in stocks.

"And you've got a lot of people away after the holiday," he noted. "But stocks are really off and that's turning some [issuers] away. It'll probably pick up about the middle of the week, I'd say."

The Dow Jones Industrial Average gave up 63.87 to close at 11,073.78; the Nasdaq composite index fell 14.95 to end at 2,311.16; and the Standard & Poor's 500 composite index dropped 3.79 to settle at 1,285.33.

Stocks were pushed down on Monday as oil prices climbed and gold prices continued their upward march.

Oil gained $1.08 to end at $70.40 per barrel, and gold advanced $18.70 to close at $618.80.

The move in both oil and gold may spark some activity among mineral and energy companies in the coming days, according to one Vancouver, B.C.-based sellsider.

"I think it will definitely push more [energy and mineral] offerings," he said. "There's a constant need for cash in the sector; so, whenever there's a major movement that will impact those stocks, there will be more offerings."

Osisko's C$10 million deal

Looking to Canada, Osisko Exploration Ltd. headed up a light day of PIPE activity there as Canadians celebrated Easter Monday.

The placement, being conducted through underwriter Canaccord Adams, Inc., includes up to 3.1 million units at C$3.25 each.

The units consist of one share and one half-share warrant with each whole warrant exercisable at C$4.00.

The unit price is a 4% discount to the company's closing stock price of C$3.40 on Thursday, and the warrant strike price represents a 17.6% premium to the same closing stock price.

When the deal priced early in the session Monday, Canaccord had been granted a greenshoe for up to 1.55 million units, but the over-allotment option was later increased to 1,825,000 units.

The deal is scheduled to close May 8.

After the deal was announced in the morning, Osisko's stock slipped 11 cents, or 3.24%, to close at C$3.29 (TSX Venture: OSK).

Proceeds will be used for exploration on the company's Canadian Malartic project and for general corporate purposes.

This certainly isn't the first time Osisko has accessed the PIPE market.

On March 20, the company arranged a C$1.08 million non-brokered offering of 600,000 units at C$1.80 each. EurAsia Holding AG, the company's principal shareholder, purchased those units, each of which included one share and one half-share warrant. The whole warrants are exercisable at C$2.36 each.

When that offering priced, the company's stock fell 21 cents to close at C$3.17.

The price per unit for the C$1.08 million deal was a 46.7% discount to the closing stock price of C$3.38 on March 17.

Also, on Dec. 23, Osisko completed a C$4,593,875 private placement of 7,067,500 units at C$0.65 each.

After the December offering concluded, the company's stock gained 25 cents to end at C$1.45.

The unit price of that offering was a 45.8% discount to the company's C$1.20 closing stock price on Dec. 22.

Montreal-based Osisko is a gold exploration company.

Hillsborough plans C$7 million offering

Another Canadian resources company, Hillsborough Resources Ltd., negotiated a C$7 million unit deal on Monday.

The offering includes up to 5,835,000 units at C$1.20 apiece.

Each units consists of one share and one half-share warrant with the full warrants allowing for the purchase of another share at C$1.50 each.

The deal is being placed through a syndicate of agents led by Canaccord Adams Inc. and the syndicate has a greenshoe for up to 2.5 million additional units.

The deal is expected to close May 9.

The stock fell 4 cents, or 3.13%, to finish at C$1.24 (Toronto: HLB).

Proceeds will be used for exploration, development, expansion and operations on the company's North American mining properties. The rest will be used for working capital.

Vancouver, B.C.-based Hillsborough is a coal-mining company.

U.S. Energy stock dips

Even though oil prices surged on Monday, U.S. Energy Corp.'s stock slumped slightly, giving up 1.42% on the day.

The stock lost 10 cents to settle at $6.95 (Nasdaq: USEG) after completing a $50 million equity line before the three-day weekend with Cornell Capital Partners, LP.

When the deal was announced Thursday, the stock climbed 4.65%, or 31 cents, to end at $7.05.

Under the terms of the three-year equity line, Cornell has agreed to buy shares of U.S. Energy at a price equal to 98% of the lowest daily volume weighted average price for the five trading days after notice of a draw.

U.S. Energy, located in Riverton, Wyo., is a gold, uranium, vanadium and molybdenum exploration company.

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